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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Improper Classification of Costs

Raytheon paid $2.7 million to settle allegations that the company “charged the Government for costs incurred in marketing products to foreign governments. Since 1986, Raytheon’s cost accounting procedures have provided for separate accounting treatment of foreign and domestic marketing costs. These procedures, and the Cost Accounting Standards of the Federal Acquisition Regulations, require the allocation of Raytheon’s foreign marketing costs to contracts between Raytheon and its foreign customers, and allocation of its domestic marketing costs to U.S. Government contracts. The Government asserted that most of the activities of the Raytheon international development function were foreign marketing activities and that Raytheon improperly classified the costs as ‘division administration’ costs allocable to Government contracts.”

Misconduct Type
Cost/Labor Mischarge
Enforcement Agency
Defense – General
Contracting Party
Defense - General
Court Type
Civil
Disposition
Settlement
Date of Settlement
4/9/1998
Contractors Involved Penalty
Total
Raytheon Company $2,700,000
Further Information Released
DOD IG Semiannual Report to Congress (p. 26) 10/11/2006

Federal Contractor Misconduct Database